Photo by: Duane Daws
Despite a mobile price war and the implementation of lower mobile termination rates (MTRs), South Africa’s cheapest call offering is five times more expensive than the cheapest product in Africa, Research ICT Africa (RIA) revealed on Monday.
While South Africa’s voice prices hovered in the same range during the fourth quarter of the year, prices in several other countries on the continent continued to decline.
The cheapest product within the Organisation for Economic Cooperation and Development countries was from Kenya’s Safaricom at $0.98, compared with the cheapest product in South Africa, Telkom Mobile’s Sim Sonke, which, at $4.5, was 42% cheaper than the cheapest product from South Africa’s dominant operator MTN’s Pay Per Second at $7.8.
In the third quarter of the year, South Africa’s dominant operator’s cheapest product was only twice as expensive as the cheapest product from a dominant operator on the index.
While South Africa ranked number nine on the African Pricing Transparency Index in terms of its cheapest product, RIA reported that the nation’s dominant operator ranking slipped from 12 to 14 in the fourth quarter of the year.
The shift was led by a change in the cheapest price by a dominant operator attempting to compete against South Africa’s third-largest mobile operator, Cell C, which had initiated the so-called price war.
“This is explained by the removal of MTN’s 1c per second product replaced by the 79c product, and the introduction of a cheaper product from Safaricom, Kenya’s dominant operator,” the RIA noted in its latest policy brief.
Following the introduction of the 20c MTR in March last year, advertised prices for Vodacom, Virgin Mobile and Telkom Mobile remained at the same level in the fourth quarter of 2014 for the cheapest prepaid product available for these operators.
In 2014, both Cell C and MTN decreased prices in the second quarter of 2014, through promotions, but then withdrew them again in the fourth quarter of 2014 to replace them with less generous promotions.